Shareholders, Claimants May Block Bid for Robins

From Reuters

A. H. Robins Co., which has agreed to be acquired by Sanofi S.A. of France, may attract another bid in part due to resistance from shareholders and Dalkon Shield claimants, analysts said Monday.

Since the bid was announced by Robins over the weekend, shareholders and the women claiming injuries from Robins' Dalkon Shield contraceptive devices have refused to back the plan.

Sanofi was one of three bidders for Robins, which plans to present the takeover proposal to a federal bankruptcy court as part of a plan to emerge from Chapter 11.

"I would guess this isn't the final round," said one analyst.

Bids Sweetened

Robins' board favored the Sanofi proposal over competing bids from Rorer Group Inc. and American Home Products Corp. Sanofi has offered to pay $600 million for 58% of Robins. Sanofi, 60% owned by Societe Nationale Elf Aquitane, also promises to guarantee bank loans for a $2.48-billion trust to resolve claims from women who used Robins' Dalkon shield intrauterine device.

American Home offered $600 million of its stock for all of Robins' stock. Rorer offered 16.6 million of its shares, valued at about $600 million, for Robins. Both had sweetened their bids.

An American Home Products spokesman declined to comment on speculation that the company was considering boosting its offer. But he did say American Home was closely monitoring the situation and reviewing its options.

Robins filed for bankruptcy because of claims against it by women who said its Dalkon Shield intrauterine device caused infertility and other problems.

'Rule Is Surprise'

Murray Drabkin, a lawyer representing claimants, said they object to the length of time that it would take them to be paid under the plan.

"There are a lot of problems with the Sanofi-Robins deal which make it very unattractive," Drabkin said.

Drabkin would not comment on speculation of another bid surfacing or other action before Robins files its plan with the court Wednesday. "The rule in this case is surprise," he said.

Sanofi's plan involves an initial cash payment to the claimant's trust of $100 million and a letter of credit for the balance. Payments could be drawn against the letter of credit, but not more than 50% in the first two years and not more than 80% in the first four years.

"We do believe the (Sanofi) offer . . . will not be the final offer. Rorer may re-bid, but we think they will be outdone either by American Home Products or a bidder that has not yet publicly emerged," said S. G. Warburg analyst Samuel Isaly.

"American Home is the most financially credible source of all parties concerned," said another analyst.

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